Feb. 23 (Bloomberg) -- The dialing back of Federal Reserve
stimulus will cause further ructions in financial markets even
as it marks an improvement in the global economy, International
Monetary Fund Managing Director Christine Lagarde said.

“The tapering that we see is a result of the significant
improvement of the global economy, but particularly the U.S.
economy, and that in and of itself is positive,” Lagarde said
today in an interview following a meeting of Group-of-20 finance
chiefs in Sydney. “There will continue to be volatility on the
markets as a result of this tapering.”

The U.S. central bank’s decision to reduce its monthly
bond-buying program to $65 billion from $85 billion followed
signs of improvement in the world’s largest economy. The move
has helped to roil markets from Turkey to South Africa and
Argentina, spurring investors to sell off emerging-economy
currencies, stocks and bonds, and prompting emergency measures
from governments and central banks.

The G-20 forum provided emerging-market economies with an
opportunity to share their concerns about policy changes being
implemented in advanced economies, including the Fed’s scaling
back of quantitative easing, Lagarde said.

The group said monetary policy should remain accommodative
for now in many advanced economies and pledged a coordinated
push to boost growth over the next five years, according to a
statement from finance ministers and governors released after
this weekend’s meeting. The timing of stimulus pullback will
depend on the outlook for prices and growth, they said.

The official communique includes a “recognition that there
are spillover effects to be had from the policy decided in one
country vis-a-vis the rest of the group,” Lagarde said.